What is LIC New Money Back Plan (20 Years)?
LIC New Money Back Plan – 20 Years (Plan No. 720) is a participating, non-linked money back plan that provides periodic survival benefits during the policy term. Unlike endowment plans where you get all money at maturity, this plan gives you a portion of the Sum Assured at regular intervals — providing liquidity when you need it most.
Survival Benefit Schedule
This is the key feature of the Money Back Plan — you receive money back at regular intervals:
Total payout over 20 years: 20% + 20% + 20% + 40% = 100% of SA + Accrued Bonus + FAB
Key Features
- Periodic Payouts: Get 20% of SA at 5th, 10th, and 15th year — money when you need it
- Bonus: Simple Reversionary Bonus at approximately ₹52 per ₹1,000 SA per year
- Final Additional Bonus (FAB): One-time bonus at maturity for qualifying policies
- Full Life Cover Throughout: Life cover for full Sum Assured continues throughout the 20-year term, even after survival benefit payouts
- Tax Benefits: Premiums qualify for Section 80C deduction. Maturity/survival proceeds tax-free under Section 10(10D)
- Loan Facility: Loan available after policy acquires surrender value (3 years)
Eligibility Criteria
- Minimum Entry Age: 13 years (completed)
- Maximum Entry Age: 45 years (nearest birthday)
- Maximum Maturity Age: 65 years
- Minimum Sum Assured: ₹1,00,000
- Maximum Sum Assured: No upper limit
- Policy Term: 20 years (fixed)
- Premium Payment: Regular — 20 years (same as policy term)
Maturity Benefit
At Maturity = 40% of SA + Accrued Bonus + FAB
(Plus 20% SA already received at 5th, 10th & 15th year)
Example: For ₹10,00,000 SA, age 30, 20-year term:
- Survival Benefits (5th + 10th + 15th year): ₹2,00,000 × 3 = ₹6,00,000
- Maturity (40% SA): ₹4,00,000
- Accrued Bonus (₹52 × 1000 × 20): ₹10,40,000
- Final Additional Bonus: ~₹2,00,000
- Total Estimated Payout: ~₹22,40,000
Death Benefit
- During policy term: "Sum Assured on Death" + Accrued Bonus + FAB (if applicable). Sum Assured on Death = Higher of (10 × Annual Premium) or (1.25 × Basic SA) — irrespective of any survival benefits already paid
- Important: Death benefit is not reduced by survival benefits already paid out. Full death benefit is payable.
Premium Payment Modes
- Yearly: Base rate (no loading)
- Half-Yearly: ~51.3% of annual premium
- Quarterly: ~25.8% of annual premium
- Monthly (ECS/NACH): ~8.7% of annual premium
Money Back 20 vs Other LIC Plans
- vs Money Back 25 (721): 25-year plan has 4 survival benefit payouts (15% each at 5th, 10th, 15th, 20th year) vs 3 payouts (20% each) in the 20-year plan. The 25-year plan has lower premiums per year but you pay for 5 extra years.
- vs Jeevan Anand (715): Jeevan Anand pays everything at maturity as a lump sum and provides post-maturity life cover. Money Back provides periodic payouts but no post-maturity cover.
- vs New Endowment (714): Endowment pays full maturity amount at once. Money Back provides liquidity during the term. Endowment may give slightly better overall returns due to full compounding.
Who Should Buy Money Back Plan (20 Years)?
- Those who need periodic cash flows every 5 years for expenses like education, weddings, etc.
- Salaried individuals wanting savings + insurance with regular returns
- People who prefer partial liquidity over lump-sum maturity
- Conservative investors seeking guaranteed, tax-free returns with life cover